Yesterday Judge Denny Chin of the United States Court of Appeals for the Second Circuit issued a long-awaited ruling in the Google book scanning case.  Judge Chin rejected the proposed settlement between Google and the plaintiffs (publishers and authors).

Here are the basic facts from an announcement in the Wall Street Journal at http://online.wsj.com/article_email/SB10001424052748704461304576216923562033348-lMyQjAxMTAxMDIwMjEyNDIyWj.html

Judge Rejects Google Books Settlement

By AMIR EFRATI

A federal judge in Manhattan on Tuesday rejected Google Inc.’s settlement with authors and publishers that would allow it to make millions of books available online, saying it would give the Internet giant the ability to “exploit” books without the permission of copyright owners.

In a 48-page decision, Denny Chin, a judge on the 2nd Circuit Court of Appeals, denied the 2008 settlement between Google, authors and publishers “without prejudice,” meaning they could submit a revised pact that would better protect copyright owners. The judge also suggested a potential solution.

“While the digitization of books and the creation of a universal digital library would benefit many,” Google’s current pact would “simply go too far” because Google could make books available online without copyright owners’ permission, Judge Chin wrote.

The deal would “give Google a significant advantage over competitors, rewarding it for engaging in wholesale copying of copyrighted works without permission,” he said.

The U.S. Justice Department last year said it opposed the deal on such grounds. The solution, Judge Chin suggested, is simple: rather than let copyright owners of books to “opt out” of the settlement, which was reached in 2008 between Google, the Authors Guild and the Association of American Publishers, copyright owners should be given the choice to “opt in.”

“I urge the parties to consider revising the [settlement] accordingly,” Judge Chin wrote.

Hillary Ware, a managing counsel for Google, said in a statement that the decision was “clearly disappointing” and the company would consider its options.

“Like many others, we believe this agreement has the potential to open-up access to millions of books that are currently hard to find in the U.S. today,” she said.

Google reached the settlement in 2008, agreeing to pay $125 million to establish a registry to allow authors and publishers to register their works and get paid when their titles are viewed online. The deal resolved a consolidated lawsuit in which authors and publishers sought to block the company from scanning books and making them searchable online.

The plaintiffs alleged that Google’s book-search project violated copyrights.

CIC Statement — http://www.cic.net/Home/NewsAndPubs/News/11-03-22/CIC-Google_Scanning_Continues_After_Google_Lawsuit_Settlement_Rejected.aspx

Despite this ruling, it is our understanding that Google will continue scanning CIC library materials (six CIC libraries, in addition to Michigan and Wisconsin, are currently sending content) under the terms of the CIC’s 2007 Agreement.

Earlier this year, the CIC celebrated a major milestone: Google had digitized a million volumes from CIC member libraries. We intend to fulfill the original agreement to scan up to 10 million volumes –public domain material being returned to the HathiTrust Digital Library and made publicly accessible, while in-copyright content is being indexed so users can better discover relevant print content in our libraries.

Judge Chin ordered a status hearing in late April, by which time we expect to know more about how Google and the plaintiffs plan to move forward, and what the implications might be for our libraries. We will keep you informed on further developments as warranted.

ARL’s blog posting can be found here — http://policynotes.arl.org/post/4044100808/judge-rejects-proposed-settlement-in-google-books

Judge Rejects Proposed Settlement In Google Books Dispute

Yesterday afternoon Judge Denny Chin rejected the proposed settlement of the Google Books lawsuit. (For background, see ARL’s GBS page and our past blog posts tagged “#gbs”). Paths forward are myriad – see our GBS March Madness flow chart for all the possibilities.

In a concise, 46-page opinion, Chin accepted nearly every objection that had been raised to the ambitious proposal, giving the most attention to the copyright issues. Judge Chin accordingly ruled that the settlement fell short of the legal requirement that a class action settlement be “fair, adequate, and reasonable.” He “urg[ed]” the parties to consider revising the agreement so that rightsholders would be required to “opt in” to be included in the program, rather than be included automatically unless they “opt out.” Chin scheduled a status conference with the parties for April 25, 2011.

Judge Chin agreed with the following objections, which had been raised by opponents of the settlement:

• Inadequate representation of the class: some authors and publishers (e.g., academic ones) may have interests very different from the mostly large, commercial publishers and authors who negotiated the settlement.

• The settlement exceeds the scope of the original conflict: the settlement is, as the U.S. Department of Justice put it, “ an attempt to use the class action mechanism to implement a forward-looking business arrangement that goes far beyond the dispute before the court.” Rather than addressing the original question of scanning and snippet display as part of a search engine, the proposed settlement created new models of commercial exploitation.

• The settlement addresses issues, such as the treatment of “orphan works,” that are better left to Congress.

• The settlement gives Google a de facto monopoly over unclaimed works.

• The settlement “arguably” gives Google control over the search market.

• The settlement is “in tension with” international law (esp. international copyright law).

Judge Chin rejected only two of the objections raised by settlement opponents: that the parties had not given adequate notice to the class-members, and that the settlement would endanger reader and author privacy.

The Judge also acknowledged the potential benefits of the settlement, including benefits to libraries and researchers. These were not enough to outweigh his concerns, however.

Jonathan Band, counsel to the Library Copyright Alliance, is currently working on an analysis of the decision. We will post that analysis here as soon as it is ready.

Brandon Butler | Director of Public Policy Initiatives | Association of Research Libraries | brandon@arl.org | w: 202.296.2296 x156 | m: 202.684.6030 | 21 Dupont Circle NW, Washington, DC 20036 | http://policynotes.arl.org